Nirmala Sitharaman urges G-20 to act collectively to head off looming global slowdown

iNDICA News Bureau-

India’s Finance Minister Nirmala Sitharaman, who is on a ten-day visit to the U.S. since April 18, has called for “proactive collective efforts” by the G-20, a grouping of the world’s top economies, to deal with the looming global economic slowdown in the wake of the Covid-19 pandemic and the Russian invasion of Ukraine.

The minister attributed the slowdown to “prolonged inflation, supply-chain disruption, volatility in energy markets and investor uncertainty”.

Sitharaman, who is in Washington DC for the annual spring meetings of the World Bank Group, was addressing fellow ministers and central bank heads of the G-20 member states.

She said the grouping “is well placed to catalyse international policy coordination to deal with macroeconomic consequences” and called for “proactive collective efforts towards protecting economies”.

The International Monetary Fund (IMF), part of the World Bank Group, has estimated that global growth will slow down from an estimated 6.1 percent in 2021 to 3.6 percent in 2022 and 2023. These projections are, respectively, 0.8 and 0.2 percentage points lower than those made in the World Economic Outlook update in January.

Beyond 2023, the IMF expects global growth to decline to about 3.3 percent over the medium term.

All these projections are based on the assumptions that the conflict in Europe will remain confined to Ukraine and further sanctions on Russia will continue to exempt the energy sector and that the pandemic’s health and economic impact will be reduced over this year. Any change in any of these assumptions could result in a further change in the projections.

The IMF and the World Bank have also cut India’s growth projections. The Fund now believes India will grow by 8.2 percent in 2022, down from its 9 percent projection in January, which itself was down half a percentage point from its previous projection.

The Bank, in a report published last week, has projected that the Indian economy will grow 8 percent in 2022.

The minister has been holding meetings with counterparts from around the world as well as with corporate leaders in the U.S. on the sidelines of the World Bank Group events. She and U.S. Commerce Secretary Gina Raimondo discussed “ways to strengthen economic cooperation in the bilateral and global contexts”, the ministry said in another tweet. She also met counterparts from the Netherlands and Suriname.

She also had a meeting with John Neuffer, president and CEO of the Semiconductor Industry Association in the U.S., to pitch for its member companies to invest in India. She informed Neuffer of the initiatives by the government to attract and support foreign investment in the industry.